20.01.2020

Afghanistan economic outlook: industry, transportation, trading, investment

Being an important part of the Greater Caspian region, Afghanistan faces lots of problems that can impede fast development of the country and the whole region. Specialists' vivid discussions about these difficulties and possible solutions shed the light on the current situation in the region.
The moderator: Murat Seitnepesov. Speakers: Mustafa Mastoor, Sham Lal Bathija, Baber Badat Sb, Zabihullah Ziarmal, Khan Agha Rezayee, Abdullah Khenjani.
The opening session begins with the statement about the dependency of the whole Greater Caspian Region on Afghanistan stability.

Mustafa Mastoor (Minister of Economy, Islamic Republic of Afghanistan) dwelled on numbers: The population of the country is only 31,5 million of people, where about 50% of Afghan population are people below 15 years old and 77% are below 30 years old. Thus, the largest part of the population was born during the War Conflict and needs special attention. GDP of the country is about 20 billion dollars and its growth is 1% less during the last 18 years. Although Afghanistan is agricultural country, the reason of GDP loss is the lack of infrastructure in the condition of rainfalls dependency. Agriculture has 21% of GDP, industry is 24% and the biggest part is service sector with 52%. Domestic revenue is small as well reaching 2,5 billion dollars per year however it showed a 25% growth from 2018 and is expected to escalate up to 8.4% more till 2024. The important issue is the population of the country and the possibility to turn them into productive labor force. Although the market seems to be risky, Mustafa Mastoor indicates to its revenue for investors. Industry, services, and agricultural business are areas for investments. Import rate is 7,5 billion$ (81% of export) however lots of goods can be produced inside country. Energy, construction, mining, IT, services, and many others are among spheres to attract businessmen and investors. So, one the main policies country works on to stimulate the growth is boosting domestic production and export as well.

Sham Lal Bathija, Minister Senior Economic Adviser, Ambassador and Special Envoy of the Former President of Afghanistan starts his speech with bright examples from his life showing how much the country changed and moved forward. Afghanistan now has all possible plans and researches for country development program, and they just need to be implemented. First thing needs to be done is to reconcile our width as it is said in psychology. Proper agreements, approaches and reconciliation can really make Afghanistan more progressive. The country is open for business, private social sector is protected, women can be chosen to the Parliament. All these changes assure us in the right direction for country development.

Baber Badat Sb, Immediate Past President, FIATA, Zurich, Switzerland indicates FIATA that is the largest logistic organization which represents 25 countries. The lack of logistics, connectivity in many parts of the world is the biggest barrier impeding the growth of global trade. Countries of Caspian Region need to be got together and create critical mass to be channeled through this area. FIATA itself encourages economy to create logistics inside the region inviting people to work with policy making organization of the world.

Zabihullah Ziarmal, First Vice Chairman, International Chamber of Commerce, Islamic Republic of Afghanistan (ICC-Afghanistan) gives a small outlook of the country in past, in current situation and in future prospective. During the cold War Afghanistan faced a lot of challenges in terms of up and downs of the economy. USSR AND USA were involved in struggling and supporting the parties which were fighting against each other. By 1967 the country had 1200 miles of roads and 25% increase of power of airport.

The rule of well functioning and growth of economy now is a contribution into stability of the country. It is believed that there is a necessity to increase the revenue by tax and non-tax sources. Public Private Partnership is a one of the alternatives with few projects to be considered in terms of financing in transportation, electricity, and other spheres. In spite of existing multiple trade opportunities within Asian countries and The Greater Caspian Region in transit, trade, energy, power and other potential areas, the cross border investment level is minimal. So, such regional infrastructural projects as airports, railway systems, terminals, free economic zones, tax regulation etc. are not sufficient. Informal sector in the country plays a strong role regarding poverty reduction. International organizations create a global platform for private sector of different countries to come there and have dialogues, discussions about policy, reforms, investment initiatives and others. Recently the country has been granted the license in order to establish the trade center in Kabul to provide tremendous boost of domestic and regional investments, trade and industry.

Khan Agha Rezayee, Member of Parliament, Islamic Republic of Afghanistan remembered 2001 year when all citizens in Afghanistan were waiting for the results of upcoming elections to reach stability, peace in the country. 60% of the parliament were new members and now everyone has big expectations. In 2018 economy was not stable, people lost their jobs, GDP was not high. People faced a lot of problems; life was not secure. However, the speaker believes that if there is peace in the country, people will invest into Afghanistan, and everything will be done to move forward and not let down investors.

Abdullah Khenjani, Founder, Democratic Society Think-Tank, Kabul, Islamic Republic of Afghanistan. Afghanistan is the most complicated and transformed region in past two decades. It has changed into one of the key centers of economy of the world as India and China. There are lots of initiatives, projects related to economy of the country which are being implemented now. On the other hand, it is one of the most conflicting regions having around 25 domestic, regional and international terrorist networks like ISIS, Taliban movement etc. Also, this region considered to be the most disconnected, disbalanced and diverse. Different political systems are supporting examples of that. There are two reasons of major economic headwinds with growth slowing to 1.8% in 2018 such as draught and intensifying insecurity. Nowadays the country presents itself as a part of a global supply, partner and want to be a bridge not only in economy, but also a piece of stability for all the region.

Transport and logistics are the most important components of regional trade and prosperity. Also, it should be mentioned that political ties between regional countries are of high importance since it could affect the connectivity and moving of the cargoes across the border.
    The moderator: Murat Seitnepesov. Speakers: Mustafa Mastoor, Sham Lal Bathija, Baber Badat Sb, Zabihullah Ziarmal, Khan Agha Rezayee, Abdullah Khenjani.
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